Windows Phone 7, CES Tablet Predictions Marked Microsoft's Week

The last week of 2010 was a quiet one for Microsoft, as the company—along with many other tech stalwarts—geared up for January's Consumer Electronics Show (CES) in Las Vegas.

Rumors suggest that Microsoft CEO Steve Ballmer will use his opening keynote at the show to reveal a line of Windows tablets. Such an event would mirror his CES 2010 keynote, when he unveiled a tablet prototype built by Hewlett-Packard along with devices from two smaller manufacturers. Microsoft doubtlessly hopes that 2011 will bring a sea change in its tablet fortunes—unlike 2010, where Ballmer's early optimism translated into nothing more than a very small handful of limited-run devices.

On Dec. 21, Bloomberg reported that Microsoft would use CES to debut a version of Windows leveraging ARM Holdings technology. That report cited unnamed sources "familiar with Microsoft's plans," and suggested the new Windows software "would be tailored for battery-powered devices, such as tablet computers and other handhelds." Both Microsoft and ARM declined to comment to Bloomberg.

If that story proves true, Microsoft's tablet plans could involve Windows devices running both ARM chips and Intel's upcoming "Oak Trail" Atom processors. Microsoft executives have repeatedly emphasized that Oak Trail will play a vital role in its upcoming tablet plans.

"Intel is going to come out with [its] Oak Trail chip around the first of the year," Bill Koefoed, Microsoft's general manager of investor relations, said Aug. 10 at the Oppenheimer Annual Technology, Media & Telecommunications Conference in Boston. "And, we think, that's going to offer a lot of new capabilities. Whether it's better usage of battery life and the like, it's going to really help move the category forward."

Microsoft will most likely use CES to highlight continuing strong sales of Windows 7, its keystone software platform, and the emergence of Windows Phone 7, its smartphone platform. The company claims sales of 1.5 million Windows Phone 7 devices during its first six weeks of release—that figure represents sales from manufacturers to mobile operators and retailers, not consumers.

However, the company will probably continue not to comment on reports that Windows Phone Marketplace can be cracked—news that spread across the blogosphere after a Dec. 29 proof-of-concept video posted by Windows Phone Central.

"A ‘white hat' developer has provided WPCentral with a proof-of-concept program that can successfully pull any application from the Marketplace, remove the security and deploy to an unlocked Windows Phone with literally a push of a button," Windows Phone Central's Daniel Rubino wrote in a Dec. 29 posting accompanying the video. "Neither the app nor the methodology is public, and it will not be released (please don't ask). It is important to note that this was all done within six hours by one developer."

Microsoft has encouraged third-party developers to create apps for the marketplace, seeking to create an ecosystem that rivals similar offerings from Google and Apple. At least one analyst this week thought that the company was making progress in its app efforts.

"Released in October, WP7 ends 2010 with over 5,000 apps in its marketplace, a milestone it reached quicker than the Google Android platform, which took almost three times as long to reach the same level," Al Hilwa of research firm IDC wrote in a Dec. 29 research note. "Of course the circumstances for such comparisons are never identical, and Google followed a more gradual and tentative launch for Android compared to Microsoft's well-orchestrated big-bang approach."

In keeping with previous CES editions, Microsoft will almost certainly use its space at the event to show off hardware created by its partners. This year, that means Windows Phone 7 smartphones, including perhaps the Verizon devices reportedly in the pipeline. It means PCs from Dell and other manufacturers. The question is, does it also mean Windows tablets ready to challenge Apple's iPad?